ex10_1.htm


    
      
        

      

    

    Exhibit
10.1

     

    STOCK
REPURCHASE AGREEMENT

    
       

      


       

      by
and between

       

      Lincoln
Educational Services Corporation

       

      and

       

      Back
to School Acquisition, L.L.C.

      


      


      Dated
as of December 15, 2009


      
        
           


        

        
           


          
            

          

        

        
           


        

      


      STOCK
REPURCHASE AGREEMENT

       

      This
STOCK REPURCHASE AGREEMENT
(this “Agreement”) is
entered into as of the 15th day of December, 2009, by and between Lincoln
Educational Services Corporation, a New Jersey corporation (the “Company”), and Back
to School Acquisition, L.L.C., a Delaware limited liability company (“Seller” and together
with the Company, the “Parties”).

       

      RECITALS:

       

      WHEREAS, as of the date
hereof, Seller owns of record 8,908,000 shares of the outstanding common stock
of the Company, no par value per share (the “Common Stock”),
representing  approximately 32.9% of the outstanding capital stock of
 the Company (the “Seller Ownership
Percentage”); and

       

      WHEREAS, Seller intends to
sell some of its shares of Common Stock (the “Rule 144 Shares”) in
accordance with Rule 144 of the Securities Act of 1933, as amended (the “Rule 144 Sale”);
and

       

      WHEREAS, in addition to the
Rule 144 Shares which Seller contemplates selling, concurrently with, and
contingent upon the Rule 144 Sale, Seller desires to sell and has offered to the
Company the right to repurchase certain shares of Common Stock held by Seller
upon the terms and subject to the conditions contained in this Agreement and the
Company has considered the advisability of purchasing such shares from Seller
upon such terms and subject to such conditions; and

       

      WHEREAS, the Company has
obtained a written opinion from its financial advisor to the effect that the Per
Share Purchase Price (as defined below) to be paid hereunder is fair to the
Company from a financial point of view; and

       

      WHEREAS, through the
repurchase, Seller will sell to the Company  approximately 4.6% of the
Company’s outstanding Common Stock, which, together with the Rule 144 Sale, will
reduce the Seller Ownership Percentage to approximately 26.7%;

       

      NOW, THEREFORE, in
consideration of the premises and the mutual covenants contained herein, and for
other good and valuable consideration, the sufficiency of which is hereby
acknowledged, the Parties hereby agree as follows:

       

       

      ARTICLE
1

      PURCHASE
AND SALE OF THE PURCHASED SHARES

       

      1.1          Purchase and Sale of
Shares.  Upon the terms and subject to the conditions set forth in
this Agreement and in reliance on the representations, warranties and covenants
set forth herein, at the Closing (as defined below), Seller shall sell, assign,
transfer and convey, or cause to be sold, assigned, transferred and conveyed, to
the Company, and the Company shall purchase, acquire and accept, one million,
two hundred fifty thousand (1,250,000) shares of Common Stock (the “Repurchase Shares”)
free and clear of all liens, claims and encumbrances of any nature
whatsoever.


      
        
           


        

        
           


          
            

          

        

        
           


        

      

      


      1.2          Purchase Price.
 At the Closing, the Company shall pay to Seller a purchase price for the
Repurchase Shares equal to the per share price of $20.95 (the “Per Share Purchase
Price”) multiplied by the number of shares purchased by the Company from
Seller pursuant to Section 1.1 of this Agreement (the “Purchase Price”) in
immediately available funds by wire transfer in exchange for  the delivery
by Seller of the Repurchase Shares.

      


      1.3          Closing.
 

      


      (a)         Subject
to terms and conditions set forth in this Agreement, the closing of the
transactions provided for in this Agreement (the “Closing”) shall occur
on the date of the closing of the Rule 144 Sale, after satisfaction or waiver of
the conditions set forth in Article 4 but in no event later than December 24,
2009 (the “Closing
Date”) at the offices of the Company, 200 Executive Drive, Suite 340,
West Orange, New Jersey  07052, or such other date or place where the
Parties may agree.

      


      (b)         At
the Closing:

      


      (i)         Seller
shall deliver to the Company (or cause to be delivered) certificates
representing the Repurchase Shares, free and clear of all liens, claims and
encumbrances of any nature whatsoever, duly endorsed to the Company or in blank
or accompanied by duly executed stock powers and otherwise in form acceptable
for transfer on the books of the Company (or shall deliver the Repurchase Shares
in such other manner as is reasonably agreed); and

      


      (ii)         the
Company shall deliver to Seller the Purchase Price in immediately available
funds to the account designated by Seller prior to the Closing
Date.

       

      ARTICLE
2

      REPRESENTATIONS
AND WARRANTIES OF SELLER

       

      Seller
represents and warrants to the Company as follows:

       

      2.1          Organization and Good
Standing.  Seller is a legal entity duly organized, validly existing
and in good standing under the laws of its jurisdiction of organization.
 

      


      2.2          Ownership of Repurchase
Shares.  Seller is the lawful owner of record of the Repurchase
Shares and has, and will transfer to the Company at the Closing, good and valid
title to the Shares, free and clear of all liens, claims and encumbrances of any
nature whatsoever and with no restriction on, or agreement relating to, the
voting rights, transfer, and other incidents of record and beneficial ownership
pertaining to the Repurchase Shares.


      
        
           


        

        
           


          
            

          

        

        
           


        

      

      


      2.3          Authorization; Binding
Obligations.  Seller has full legal right, power, capacity and
authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby.   The execution and delivery by
Seller of this Agreement and the performance of its obligations hereunder have
been duly authorized by all necessary corporate, limited liability company or
other action on the part of Seller and no further consent or authorization is
required and, assuming the due authorization, execution and delivery of this
Agreement by the Company, this Agreement constitutes a valid and binding
obligation of Seller, enforceable against Seller in accordance with its
respective terms, except as may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting creditors’ rights
generally or by general equitable principles.

      


      2.4          No Conflicts.
 Neither the execution and delivery of this Agreement by Seller, nor the
consummation by Seller of the transactions contemplated hereby will conflict
with, result in a termination of, contravene or constitute a default under, or
be an event that with the giving of notice or passage of time or both will
become a default under, or give to any other person any right of termination,
amendment, acceleration, vesting or cancellation of or under, or accelerate the
performance required by or maturity of, or result in the creation of any lien or
loss of any rights of Seller pursuant to any of the terms, conditions or
provisions of or under (a) any agreement, credit facility, debt or other
instrument (evidencing a Seller or subsidiary debt or otherwise) or other
understanding to which Seller or any subsidiary is a party or by which any
property or asset of Seller or any subsidiary is bound or affected, (b) any law
applicable to Seller or (c) its certificate of formation or operating
agreement, except in the case of (a) and (b) above, to the extent such conflict,
termination, contravention, default, amendment, acceleration, vesting,
cancellation, lien or loss would not reasonably be expected to result in a
Seller Material Adverse Effect (as defined below).

      


      “Seller
Material Adverse Effect”  shall mean a material adverse change in the
condition, financial or otherwise, or in the earnings, business affairs, or
business prospects of Seller and its subsidiaries considered as one enterprise,
whether or not arising in the ordinary course of business.

      


      2.5          Brokerage.  Other
than any commissions or other fees in connection with the Rule 144 Sale, there
are no claims for brokerage commissions or finder’s fees or similar compensation
in connection with the transactions contemplated by this Agreement based on any
arrangement or agreement made by or on behalf of Seller.

      


      ARTICLE
3

      REPRESENTATIONS
AND WARRANTIES OF THE COMPANY

       

      The
Company hereby represents and warrants to Seller as follows:

       

      3.1          Organization and Good
Standing.  The Company is a legal entity duly organized, validly
existing and in good standing under the laws of its jurisdiction of organization
and has all requisite power and authority to own, operate and lease its assets
and to carry on its business as currently conducted.  


      
        
           


        

        
           


          
            

          

        

        
           


        

      

      


      3.2          Authorization; Binding
Obligations.  The Company has full legal right, power, capacity and
authority to execute and deliver of this Agreement and to consummate the
transactions contemplated hereby.  The execution and delivery by the
Company of this Agreement and the performance of its obligations hereunder have
been duly authorized by all necessary corporate or other action on the part of
the Company and no further consent or authorization is required and, assuming
the due authorization, execution and delivery of this Agreement by Seller, this
Agreement constitutes a valid and binding obligation of the Company, enforceable
against the Company in accordance with its respective terms, except as may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
other similar laws affecting creditors’ rights generally or by general equitable
principles.

      


      3.3          No Conflicts.
 Neither the execution and delivery of this Agreement by the Company, nor
the consummation by the Company of the transactions contemplated hereby will
conflict with, result in a termination of, contravene or constitute a default
under, or be an event that with the giving of notice or passage of time or both
will become a default under, or give to any other person any right of
termination, amendment, acceleration, vesting or cancellation of or under, or
accelerate the performance required by or maturity of, or result in the creation
of any lien or loss of any rights of the Company pursuant to any of the terms,
conditions or provisions of or under (a) any agreement, credit facility,
debt or other instrument (evidencing a Company or subsidiary debt or otherwise)
or other understanding to which the Company or any subsidiary is a party or by
which any property or asset of the Company or any subsidiary is bound or
affected, (b) any law applicable to the Company or (c) its certificate of
incorporation or bylaws, except in the case of (a) and (b) above, to the extent
such conflict, termination, contravention, default, amendment, acceleration,
vesting, cancellation, lien or loss would not reasonably be expected to result
in a Company Material Adverse Effect (as defined below).  

      


      “Company
Material Adverse Effect” shall mean a material adverse change in the condition,
financial or otherwise, or in the earnings, business affairs or business
prospects of the Company and its subsidiaries considered as one enterprise,
whether or not arising in the ordinary course of business.

      


      3.4          Brokerage.  Other
than any commissions or other fees in connection with the Rule 144 Sale, there
are no claims for brokerage commissions or finder’s fees or similar compensation
in connection with the transactions contemplated by this Agreement based on any
arrangement or agreement made by or on behalf of the Company.

      


      ARTICLE
4

      CONDITIONS
PRECEDENT TO CLOSING

       

      4.1           Conditions Precedent to
Seller’s Obligations. The obligations of Seller to consummate the
transactions contemplated herein are subject to the fulfillment at or prior to
the Closing of each of the following conditions (any or all of which may be
waived in whole or in part by the Seller):

       

      (a)           The
representations and warranties of the Company contained in Article 3 hereof shall be
true and correct in all material respects as of the Closing Date as though made
as of the Closing Date.

       

      
        
           


        

        
           


          
            

          

        

        
           


        

      

      


      (b)           The
Company shall have performed and complied in all material respects with all
agreements and covenants required by this Agreement to be so performed or
complied with by the Company at or prior to the Closing.

       

      (c)           The
sale of the Rule 144 Shares by Seller shall have been completed.

      


      (d)           No
temporary restraining order, preliminary or permanent injunction or other
judgment, decision or order issued by any governmental authority of competent
jurisdiction shall be in effect preventing the consummation of the transactions
contemplated hereby.

       

      4.2           Conditions Precedent to the
Company’s Obligations. The obligations of the Company to consummate the
transactions contemplated herein are subject to the fulfillment at or prior to
the Closing of each of the following conditions (any or all of which may be
waived in whole or in part by the Company):

       

      (a)           The
representations and warranties of the Seller contained in Article 2 hereof shall
be true and correct in all material respects as of the Closing Date as though
made as of the Closing Date.

       

      (b)           The
Seller shall have performed and complied in all material respects with all
agreements and covenants required by this Agreement to be so performed or
complied with by the Seller at or prior to the Closing.

       

      (c)           The
sale of the Rule 144 Shares by Seller shall have been completed..

      


      (d)           No
temporary restraining order, preliminary or permanent injunction or other
judgment, decision or order issued by any governmental authority of competent
jurisdiction shall be in effect preventing the consummation of the transactions
contemplated hereby.

      


      (e)           The
opinion received from the Company’s financial advisor prior to the execution of
this Agreement to the effect that the Per Share Purchase Price to be paid
hereunder is fair to the Company from a financial point of view shall not have
been withdrawn or qualified.

      


      ARTICLE
5

      MISCELLANEOUS

       

      5.1.          No Implied
Representations. Except as specifically set forth in Articles 2 and 3
above, no party hereto is making any express or implied representation or
warranty to any other party in connection with this Agreement.

      


      5.2.          Entire
Agreement.  This Agreement represents the entire agreement of
the parties hereto, and supersedes all prior agreements and understandings
relating to the subject matter hereof.


      
        
           


        

        
           


          
            

          

        

        
           


        

      

      


      5.3.          Binding Effect;
Assignment.  This Agreement shall inure to the benefit of, and
be binding upon, the parties and their successors.  The parties shall
not assign their rights, duties or obligations hereunder in whole or in part and
any such purported assignments shall be void.

      


      5.4.          Counterparts.  This
Agreement may be executed in counterparts, each of which shall be deemed to be
an original, but all of which taken together shall constitute one and the same
document.

      


      5.5.          Amendment and
Waiver.  No amendment of this Agreement shall be binding unless
the same shall be in writing and duly executed by the parties
hereto.  No waiver of any of the provisions of this Agreement shall be
deemed to or shall constitute a waiver of any other provision hereof (whether or
not similar).

      


      5.6.          Expenses.  Each
party shall be responsible for paying its own fees, costs and expenses,
including fees of counsel and financial advisors, in connection with this
Agreement and the transactions contemplated herein.

      


      5.7          Termination.  The
Company or Seller may terminate this Agreement if (i) there shall be a material
breach by the other party of its representations, warranties, covenants or
agreements contained in this Agreement, (ii) there shall have been issued, by a
court of competent jurisdiction, a permanent or final order, decree or
injunction prohibiting or restraining the consummation of the transactions
contemplated hereby, or (iii) by mutual consent of the Company and
Seller.

      


      5.8          Governing Law;
Construction.  This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York regardless of
the laws that might otherwise govern under principles of conflict of laws
applicable thereto.

      


      5.9.          Notices.  Any
notice, request, instruction or other document to be given hereunder by either
party to the other shall be in writing and shall be deemed given when received
and shall be (a) delivered personally or (b) mailed by certified mail, postage
prepaid, return receipt requested or (c) delivered by Federal Express or a
similar overnight courier or (d) sent via facsimile transmission to the fax
number given below, as follows:

      


      If to the
Company, addressed to:

      


      Lincoln
Educational Services Corporation

      200
Executive Drive, Suite 340

      West
Orange, New Jersey  07052

      Attention: Mr. Kenneth Swisstack,
General Counsel

      Fax:  (973)
766-9130

      


      With a
copy to:

      


      McCarter
& English, LLP

      Four
Gateway Center

      100
Mulberry Street

      Newark,
New Jersey  07102

      Attention: Todd Poland,
Esq.

      Fax:  (973)
297-3819


      
        
           


        

        
           


          
            

          

        

        
           


        

      

      


      If to the
Seller, addressed to:

      


      Back to
School Acquisition, L.L.C.

      c/o
Stonington Partners, Inc.

      600
Madison Avenue, 16th
Floor

      New York,
New York  10022

      Fax:  (212)
339-8585

      


      with a
copy to:

      


      Shearman
& Sterling LLP

      599
Lexington Avenue

      New York,
New York  10022

      Attention: Rohan Weerasinghe,
Esq.

      Fax:  (212)
848-7830

      


      [Signatures
appear on the following page]


      
        
           


        

        
           


          
            

          

        

        
           


        

      


      IN WITNESS WHEREOF, each of
the Parties hereto has caused this Agreement to be executed as of the date first
above written.


       

      
        	 
      	
                COMPANY

              
	 
      	 
      
	 
      	
                LINCOLN
      EDUCATIONAL SERVICES CORPORATION

              
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
                By:

              	
                
                  /s/
      David Carney

                

              
	 
      	 
      	
                David
      Carney

                Chief
      Executive Officer and

                Chairman
      of the Board

              


      

      


      
        	 
      	 
      	 
      
	 
      	
                SELLER

              
	 
      	 
      
	 
      	
                BACK
      TO SCHOOL ACQUISITION, L.L.C.

              
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
                By:

              	
                
                  /s/James
      J. Burke, Jr.

                

              
	 
      	 
      	
                James
      J. Burke, Jr.

                President